North Carolina Attorney General Jeff Jackson has initiated legal action against six prominent property management companies, alleging they conspired to artificially inflate rental prices across the state. The lawsuit, filed in collaboration with the U.S. Department of Justice (DOJ) and several other states, accuses these landlords of utilizing RealPage Inc.’s software to coordinate rent increases, thereby suppressing market competition.
Defendants Named in the Lawsuit:
• Greystar Real Estate Partners LLC
• Blackstone’s LivCor LLC
• Cushman & Wakefield Inc.
• Pinnacle Property Management Services LLC
• Willow Bridge Property Company LLC
• Cortland Management LLC
These companies collectively own or manage approximately 70,000 rental units in North Carolina, representing a significant portion of the state’s housing market.
Allegations and Legal Basis:
The lawsuit contends that the defendants engaged in anticompetitive practices by sharing sensitive rental pricing and occupancy data through RealPage’s software platform. This alleged data exchange enabled the landlords to synchronize rent increases, undermining free market dynamics and disadvantaging tenants. The complaint asserts violations of Sections 1 and 2 of the Sherman Antitrust Act, which prohibit concerted actions that restrain trade and efforts to monopolize a market.
Background on RealPage Inc.:
RealPage, a Texas-based real estate software firm, offers revenue management tools designed to assist property owners in setting rental prices. The company’s algorithm analyzes market data to recommend optimal pricing strategies. However, critics argue that such tools can facilitate coordinated pricing among competitors, effectively reducing competition. RealPage’s software is reportedly utilized in managing millions of rental units nationwide.
Statements from Involved Parties:
• Attorney General Jeff Jackson: “While Americans across the country struggled to afford housing, the landlords named in today’s lawsuit shared sensitive information about rental prices and used algorithms to coordinate to keep the price of rent high.”
• Greystar Real Estate Partners LLC: The company has denied the allegations and stated it plans to “vigorously defend” itself in the lawsuit.
Implications for North Carolina Residents:
The alleged collusion has potential ramifications for renters statewide, particularly in urban centers where these companies hold substantial property portfolios. By purportedly manipulating rental prices, the defendants may have contributed to housing affordability challenges faced by many North Carolinians.
Broader Legal Context:
This lawsuit is part of a wider federal initiative to scrutinize and address anticompetitive practices in the real estate sector. The DOJ’s action against RealPage and associated landlords marks a significant move toward ensuring fair competition and protecting consumer interests in the housing market.
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